Severance pay in Thailand.

Under the circumstance of normal termination of employment where “termination of employment” means:

  • The company prevents an employee from continuing to work and receive his basic pay thereof, whether due to the termination of an employment contract or for any other reason
  • The situation where an employee cannot work and be paid because the company can no longer operate its business

The company shall pay severance pay to an employee whose employment is terminated, as follows:

  • Gor – An employee who has worked for at least 120 consecutive days, but for less than one year shall be paid severance pay for not less than 30 days at the most recent rate of basic pay or the basic pay received in respect of the preceeding 30 days in the case of an employee who receives his basic pay based upon his output
  • Khor – An employee who has worked continuously for at least one year but less than three years shall be paid severance pay for not less than 90 days at the most recent rate of basic pay or the basic pay received in respect of the preceeding 90 days in the case of an employee who receives his basic pay based upon his output
  • Kor – An employee who has worked continuously for at least three years but less than six years shall be severance basic pay for not less than 180 days at the most recent rate of basic pay or the basic pay received in respect of the preceeding 180 days in the case of an employee who receives his basic pay based upon his output
  • Ngor – An employee who has worked continuously for at least six years but less than 10 years shall be paid severance pay for not less than 240 days at the most recent rate of basic or the basic pay received in respect of the preceeding 240 days in the case of an employee who receives his basic pay based upon his output
  • Jor – An employee who has worked for more than 10 years consecutively shall be paid severance pay for not less than 300 days at the most recent rate of basic pay or the basic pay received in respect of the preceeding 300 days in the case of an employee who receives his basic pay based upon his output

Exceptions of paying severance pay

The company is not required to pay severance pay to an employee whose employment has been terminated for any of the following reasons:

  • Dishonest performance of his duties or the intentional commission of a criminal act against the company
  • Intentionally causing loss to the company
  • Performance of an act of gross negligence which results in severe loss to the company
  • Violation of the company’s work rules and regulations or orders which are both lawful and equitable when the company has already issued the employee with a prior written warning
  • Neglect of his duties for a period of three consecutive work days without reasonable cause, whether or not a holiday intervenes
  • Imprisonment by reason of a final judgment, except in the case of offences which arise from negligence of for petty offences

Termination of employment

  • Gor – The employment with a fixed duration may expire without any requirement for advance notice from both the company and an employee
  • Khor – Where no specific term is set out in the employment contract, the company may terminate or an employee may resign by giving a written notice to the other party at least one instalment of payment advance or longer but there is no need to be longer than three months advance notice
  • The termination because of improvements to the working unit, production, distribution or service processes arising from the utilization of machinery or a change of machinery or technology, and which is the cause of the reduction in the number of the employees. The company shall act the following:
    • The company shall send notification to the employee to be terminated, of the date of termination of employment, the reasons for terminating the employment and name(s) of employee(s) to be terminated at least 60 days in advance of the employment termination date. Where the company fails to give advance notice less than 60 days in advance, the company shall pay special severance pay in lieu of the advance notice in an amount equal to 60-day pay at the most recent rate of basic pay, or the basic pay received in respect of the preceeding 60 days in the case of an employee who receives his basic pay based upon his output.
    • In the case the employee has worked continuously for six years or more, the company shall pay special severance pay in addition to the severance pay under Clause 8.1, in an amount of not less than the basic pay received for the most recent 15 days, for each complete year of work; or not less than the basic pay received for the most recent 15 days for each complete year of work in the case of an employee who receives his basic pay based upon his output, but the total severance pay shall not, in the aggregate, exceed 360-day basic pay at the most recent rate or not exceed the basic pay for the last 360 days in the case of an employee who receives his basic pay based upon his output. Where an employment period is less than one year but the fraction thereof is greater than 180 days, it shall be deemed to be one year of employment.
  • Where an employer relocates its place of business, and the relocation materially affects the ordinary course of living of the employee or his family, the company shall act the following:
    • Notify the employee of the relocation not less than 30 days prior to the date of relocation. Where the company fails to give advance notice of relocation of its place of business to an employee less than 30 days, the company shall pay special severance pay in lieu of the advance notice in an amount equal to 30-day pay at the most recent rate of basic pay, or the basic pay received in respect of the preceeding 30 days in the case of an employee who receives his basic pay based upon his output.
    • If an employee does not wish to work for the company at the new location, such employee has the right to terminate the employment contract and be entitle to special severance pay at the rate of not less than 50 per cent of the rate of severance pay which the employee would be entitled to under Clause 8.1. Upon the submission, within 30 days from the date the company relocates the place of business, by an employee of a request to the Labor Welfare Committee, that Committee will consider whether or not the company must give prior notice or whether or not the employee is entitled to terminate his employment contract with the right to receive special severance pay.
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